Research Project

On
“Study of Grievance Redressal System in the
Bank with suggestions for improvement”

Submitted by:

……………………………..

1 Grievance Redressal System in the Banks suggestions for improvement.

 ACKNOWLEDGEMENT

It would not have been possible for us to carry out this project without
the support and guidance of our seniors. We would like to express our
gratitude towards them for the same.
First of all we express our sincere thanks to ……………………………. for giving
us the opportunity to work on this project and their guidance, inspiration,
sustained encouragement given to us during the course of research
project.
We express our appreciation to all the staff members with special
reference to ………………………, field functionaries for their valuable
suggestions during the completion of this project. This work could not
have been completed without their support and advices.

We express our thanks to all of them for their cooperation.

Dated:
Place:

Grievance Redressal System in the Banks suggestions for improvement.

2
 Table of contents

S.no content Page no

1. Introduction 4

2. Objective of the Project 5

3. Methodology and Limitation of the project. 6

4. Customer Grievances redressal system in banks in 7

India
5. Grievance redressal and customer satisfaction 8

6. Charter of Customer Rights 10

7. BCSBI ( Banking Codes and Standards Board of India) 12

8. Resolution of Grievances or Complaints 16

9. Grievance Redressal Policy of Our Bank 17

10. Findings & Discussion 26

11. Consumer complaints and RBI 34

12. National consumer helpline 35

13. Suggestions 38

14. Conclusion 40

15 References 41

16. Questionnaire 42

Grievance Redressal System in the Banks suggestions for improvement.

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 Introduction
In the present scenario of competitive banking, excellence in customer
service is the most important tool for sustained business growth.
Customer complaints are part of the business life of any corporate entity.
This is more so for banks because banks are service organizations. As a
service organization, customer service and customer satisfaction should
be the prime concern of any bank. The bank believes that providing
prompt and efficient service is essential not only to attract new
customers, but also to retain existing ones. So there is endeavor to
minimizing instances of customer complaints and grievances through
proper service delivery and review mechanism and to ensure prompt
redressal of customer complaints and grievances. There should also be a
review mechanism to identify shortcomings in product features and
service delivery. Customer dissatisfaction would spoil bank‟ s name and
image.

Grievance Redressal System in the Banks suggestions for improvement.

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 Objective of the Project
In today‟ s ever-changing banking environment, customer complaints are
more complex and rising. The demand for speedy redressal is expected
not only from customers but also from the regulators. Moreover, a
systematic and comprehensive approach towards customer complaint
management also provides input for product‟ s feature enhancements and
development of new products. There are numerous advantages of having
a robust Grievances Redressal System in place. We already have a robust
system in our Bank, but whether it is achieving the intended objectives or
not is subject of research. This study mainly focuses on Present Grievance
Redressal System in our Bank vis a vis scope for its improvisation”. The
objective of the project to study the following.
 To understand the reason for customer compliant.
 To study internal machinery to handle customer compliant &
grievances.
 To study functioning of Customer Service Committee at Branch
level
 To study awareness among staff members for handling
complaints
 To study functioning Customer Care Unit.
 To study adherence of Turn Around Time (TAT)
 To study overall grievances resolution process of our Bank.
 To compare data of peer banks with ours for analysis.
 To summaries the sort comings of the present system.
 To suggest certain points for improvement.
 To indicate suitable action plan for each suggested solution.

Grievance Redressal System in the Banks suggestions for improvement.

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 Methodology and Limitations

Methodology

 Collection of data from external sources like RBI website, BCSBI

report, internet, magazines etc. for getting various reasons/sources
of customer complaints.
 Collection of information /opinions from field functionaries through
a suitable questionnaire about reason for customer compliant,
effectiveness of internal machinery, support of Customer Care Unit
,TAT in grievances redressal etc.

Limitations

 The study is mainly based on data collected mostly from the

questionnaire and personal interaction with our bank officials.
 The effectiveness of the suggestions is based on the various opinions
given by the field functionaries.
 It is also to note that these suggestions are based on secondary data
which differ from place to place and it is nature wise different as
different type of services are having different issues, therefore,
suggestions may not be holding ground over long term .

Grievance Redressal System in the Banks suggestions for improvement.

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Customer grievance redressal system (CGRS) in banks
Why Customer Service?

With the increasing competition in the financial market place, where the
products are more or less similar, the only differentiator which will help
in increase as well as retain customer base is Customer Service. There
are so many factors to give best customer service:-

 Growing Competition from the peers and private and foreign banks.
 To meet the Growing expectations of customers.
 To build and retain customer base.
 To increase profitability.

Customer service is the act of taking care of the customer‟ s needs by

providing and delivering professional, helpful, high quality service and
assistance before, during and after the customer‟ s requirements are met.
Customer service is meeting the needs and desires of any customer.
Service quality and customer satisfaction are the two most important
factors that banks must understand in this context. Every year banks
receive a number of complaints and many of them remain pending at the
end of the year, which demonstrates incompetency of the Grievance
Redressal system of the banks to resolve all the customer complaints.

In the light of the Talwar Committee (1975) and Goiporia Committee

(1990) banks were required to set up customer service committees at the
branch level. But this did not lead to desired improvement in customer
service. The Reserve Bank of India (RBI) has started the Banking
Ombudsman Scheme.

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Grievance redressal and customer satisfaction:-

Customer is the „king‟ of any business, whether it may be big, medium or

small. Due to overgrowing competition, increases in consumer literacy
level, awareness of customers about their rights, increase in standard of
living are forcing banking industry to review their service strategy.
Rendering quality service is very much essential to satisfy and retain the
customers. Banks today are increasingly providing customer service in
support of customer relationship. Today public sector and private sector
banks are offering grievance redressal services not only to improve their
own internal processes but also to increase facilities and services to their
customers. The Reserve Bank is playing an important role towards the
implementation and improvement in the grievance redressal process,
which has resulted in quality of services of the banking sector in India.
„Complaint‟ means a representation in writing or through electronic
means containing a grievance alleging deficiency in banking services; and
a customer can lodge a complaint on any one of the grounds concerned
with deposit accounts, ATM/debit/credit cards, remittances, loans and
advances, etc., or any other matter relating to the violation of the
directives issued by the RBI in relation to banking/other services (Banking
Ombudsman Scheme-BOS, 2006).

In today‟ s scenario of the banking sector with a large number of services

and huge customer size, it is an accepted fact that there will be growing
number of customer grievances against the services of banks. Causes of
grievance may be - An efficient bank is one who has an effective
mechanism not only for providing excellent service but for redressing the
complaints of customers. An effective grievance redressal system is an

Grievance Redressal System in the Banks suggestions for improvement.

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important tool that will help managers and banks to increase the
satisfaction level of customers. Customer satisfaction is important to the
success of every business organization. Satisfied customers are loyal to
their service provider‟ s. In the banking sector, the whole range of activity
and generation of income swivels around the customer. Thus, it is
necessary to identify the key success factors in the banking industry, in
terms of customer satisfaction. Customer grievance redressal is a suitable
strategy for taking better care of customers. The grievance is the last
word any businessman wants to hear. A grievance without resolution
leads to dissatisfaction beyond control. The redressal of customer
grievance is pre-requisite for ensuring customer retention and
satisfaction. Banks are bound to fulfill obligations lies with them.
Grievances occur when any of the services are not provided by banks in a
proper manner or in time. In banking sector customer satisfaction cannot
be achieved without having an effective procedure for redressing the
complaints of dis-satisfied customers. The purpose of this research is to
understand the impact of service quality dimensions of CGRS on customer
satisfaction in banks in India.

Grievance Redressal System in the Banks suggestions for improvement.

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 Charter of Customer Rights:-

1. Right to Fair Treatment: Both the customer and the financial services
provider have a right to be treated with courtesy. The customer should
not be unfairly discriminated against on grounds such as gender, age,
religion, caste and physical ability when offering and delivering
financial products.

2. Right to Transparency, Fair and Honest Dealing: The financial

services provider should make every effort to ensure that the contracts
or agreements it frames are transparent, easily understood by and well
communicated to, the common person. The product‟ s price, the
associated risks, the terms and conditions that govern use over the
product‟ s life cycle and the responsibilities of the customer and
financial service provider, should be clearly disclosed. The customer
should not be subject to unfair business or marketing practices,
coercive contractual terms or misleading representations. Over the
course of their relationship, the financial services provider cannot
threaten the customer with physical harm, exert undue influence, or
engage in blatant harassment

3. Right to Suitability: The products offered should be appropriate to the

needs of the customer and based on an assessment of the customer‟ s
financial circumstances and understanding.

4. Right to Privacy : Customers‟ personal information should be kept

confidential unless they have offered specific consent to the financial
services provider or such information is required to be provided under

Grievance Redressal System in the Banks suggestions for improvement.

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 the law or it is provided for a mandated business purpose (for
example, to credit information companies). The customer should be
informed upfront about likely mandated business purposes. Customers
have the right to protection from all kinds of communications,
electronic or otherwise, which infringe upon their privacy.

5. Right to Grievance Redress and Compensation: The customer has a

right to hold the financial services provider accountable for the
products offered and to have a clear and easy way to have any valid
grievances redressed. The provider should also facilitate the redress of
grievances stemming from its sale of third party products. The
financial services provider must communicate its policy for
compensating mistakes, lapses in conduct, as well as non-performance
or delays in performance, whether caused by the provider or
otherwise. The policy must lay out the rights and duties of the
customer when such events occur.

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 BCSBI ( Banking Codes and Standards Board of India):-

Based on the recommendations of committee on Procedures and

Performance Audit of on Public Services (Tara pore Committee), RBI in
its annual policy for 2005-06, had proposed to set up an independent
Banking Codes and Standards Board of India (BCSBI).

i. Constitution-

 Registered as a separate society under the Societies Registration

Act, 1860.
 An independent banking industry watchdog to ensure that the
consumer of banking services get what they are promised by the
banks.
 Reserve Bank to lend financial support for a limited period of
five years.
 To ensure that the Board really functions as an autonomous and
independent watchdog of the industry, the Reserve Bank extends
financial support to the Board by way of meeting its full
expenses for the first five years.

ii. Objectives-

The Main objectives of the BCSBI are:

 To plan, evolve, prepare, develop, promote and publish

voluntary comprehensive Codes and Standards for banks,
providing fair treatment to their customers.
 To function as an independent and autonomous watch dog to
monitor and to ensure that the banking Codes and Standards
Grievance Redressal System in the Banks suggestions for improvement.
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 adopted by the banks are adhered to in true spirit in delivering
services, as promised, to the customers.

iii. CODES-

BCSBI has in collaboration with the Indian Banks' Association (IBA),

evolved two codes–

1. Code of Bank’s Commitment to Customers

2. Code of Bank’s Commitment to Micro and Small Enterprises.

BCSBI, after series of deliberations/consultations with the representatives

of banks, RBI, IBA etc. has once again carried out revision in the codes in
January 2014 and MSE Codes in 2015.

iv. Powers of the BCSBI

The Code will be enforced by the BCSBI by introducing a system of

monitoring of compliance by the member banks.

For this purpose the BCSBI will be resorting to-

 Calling for annual compliance reports from the member banks.

 Mystery shopping visits.
 Visits to the offices of the member banks by persons deployed
for the purpose by the BCSBI.

The BCSBI is based on the principle of self regulation. Membership is

voluntary. As such, banks joining as members are expected to comply.

The actions taken by BCSBI will have a deterrent effect.

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 BCSBI is having the backing of the RBI which will derive supervisory
comfort from the success of the endeavour.

v. Complaints and BCSBI

The BCSBI does not deal with individual cases of complaints. However,
in case complaints point to any serious failing in complying with the
code, the BCSBI may investigate and initiate appropriate action. The
BCSBI is interested in cases where member banks appear to have
breached the Code.

vi. Bank’s code for customer service

 BCSBI on 03.07.2006 released the Bank‟ s codes for Customer

Service which is a voluntary Code. The code sets minimum
standards of banking practices for banks to follow when banks
are dealing with individual customers. It provides protection to
the customers and explains how banks are expected to deal with
the customers for their day-to-day operations.
 Objectives of the code: the code has been developed with the
view to-
 Promote good and fair banking practices by setting minimum
standards in dealing with the customers
 Increase transparency so that the customers can have a better
understanding of what they can reasonably expect of the services
 Encourage market forces, through completion, to achieve higher
operating standards
 Promote a fair and cordial relationship between the customers and
their bank

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 Foster confidence in the banking system.

 Application of code:
 Current deposit, saving deposit, term deposit, recurring deposit,
PPF accounts and all other deposit accounts
 Payment services such as pension, payment orders, remittances by
way of demand drafts and wire transfers
 Banking services related to Government transactions
 Demat accounts, equity, government bonds
 Indian currency notes exchange facility
 Collection of cheques, safe custody services, safe deposit locker
facility
 Loans and overdrafts
 Foreign Exchange services including money changing
 Third party insurance and investment products sold through our
branches
 Card products including credit cards, debit cards, ATM cards and
services (including credit cards issued by our subsidiaries/
companies promoted by us)

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 Resolution of Grievances or Complaints:-

 Branch Manager has the primary responsibility for the resolution

of complaints/grievances in respect of customers serviced by the
branch. He would be responsible for ensuring closure of all
complaints received at the branches within the Turnaround Time
(TAT) prescribed in the Grievance Redressal Policy of the bank.
This will include all complaints received through Customer Care
Unit also.

 It is the foremost duty of Branch Manager to see that the

complaint is resolved to the full satisfaction of the customer. If
however the customer is not satisfied then he should be informed
about alternate avenues for Redressal to enable him to escalate
the issue.

 If the Branch Manager is unable to solve the problem, he should

refer the case to Regional or Field General Manager’s Office for
guidance.

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 Grievance Redressal Policy of Our Bank:-

Banks policy on grievance redressal follows the under noted principles:

 Customer is treated fairly at all times.

 Complaints by customers are dealt with courtesy and on time.
 Customers are fully informed of avenues to escalate their
complaints.
 Bank will treat all complaints efficiently and fairly.
 The bank employees must work in good faith and without prejudice
to the interest of the customer.

The banks internal grievance machinery provides for a nodal officer in

the rank of General Manager designated as Chief Grievances Officer
with suitable administrative structure and a Customer Care Unit, to
support the handling of customer grievances.

Customers are given facility to lodge complaints through Bank‟ s Web

site, by e-mail, through Call Center or in writing or by oral submission
to an official at its branches or higher offices (oral submission will
have to be with specific advice for registering it as a complaint and
not a casual mention or observation).

All complaints are acknowledged and given a reference number.

Complaints as per requirement are to be resolved within a maximum of
21 days (15 days in case of online grievance), unless specific additional
time is sought for resolution due to the nature of complaint, as
intimated to the complainant.

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For grievances which remain unresolved even after the mandatory period
or the customer is unsatisfied about the resolution process, the bank has
appointed an Internal Ombudsman

Internal Ombudsman would try to arrive at a settlement by mutual

agreement between the bank and the complainant through conciliation
and mediation and if accepted draw a settlement agreement to be signed
by both the parties.

The customer, if not satisfied with the settlement offer, will however be
at liberty to appeal to the Banking Ombudsman of the Reserve Bank of
India.

A. Customer Care Unit:-

 Bank has put in place a Customer Care Unit (CCU) which oversees
the resolution of complaints not resolved at the field level.
 The Unit has the full support of top management and bases its
functioning on the following Four building blocks:
 People – Union Bank is staffing its Customer Care Unit with the
following teams:
1. Solutions Team: This resolves grievances and comprises subject
matter
experts (e.g. ATM, Internet Banking). This team interacts with
customers, branches and offices wherever necessary for addressing
complaints.
2. Problem Solving Team: This identifies and solves root causes of
critical and recurring complaints.
3. Monitoring Team: which owns/monitors key complaint resolution

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 metrics.

 IT Infrastructure - Implementing an integrated complaint

management system comprising IT tools which enable complaint
registration, routing, tracking and key analysis.
 Process – Developing standard operating procedures for handling
complaints and queries that come to the Customer Care Unit. This
will include the registration process, routing, interaction,
resolution and feedback to the customer. Scripts and tracking tools
will be created to help the team solve the complaints efficiently.
 Performance - Developing robust performance management
system including dashboards and review mechanism.

Time frame:-

Complaints indirectly reveal weak spots in the working of the Bank.

Complaints received should be analyzed from all possible angles.
Specific time schedule has been set up for handling complaints and
disposing them at all levels including Customer Care Unit, branches,
Regional/Field General Manager‟ s Office and Central Office.

The processes of handling complaints/grievances are as under:

 If the complaint is received in writing the Bank will send an

acknowledgement/ a response within a week. After examining the
matter the Bank will send a final response within a period of 30
days.
 If the complaint is registered in the integrated complaint
management system, after being received through Grievances

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 Online link or Call Centre or other system set up by the bank, the
time schedule will be as per TAT (turnaround time) defined for
each complaint subhead. The system auto escalates unresolved
complaints to the concerned Reporting Officer and then to higher
levels including Regional Office/Field General Manager’s
Office/Central Office.
 If the complaint is received orally or over telephone it should be
the endeavor of the bank official to have the complaint entered in
the integrated complaint management system, so as to enable
tracking and handling by Customer Care Unit.
 He should also encourage the customer to use the Grievances
Online link or Call Centre or other system set up by the bank, on
future occasions. This should also be the case for complaints
received through email or in writing.

B. Internal Ombudsman:-

The Internal Ombudsman system is introduced with the

objective of enabling customers of the Bank to access an
independent arbitrator for their complaints, when they are not
satisfied with the resolution provided by the Bank. However the
customer continues to retain the right to approach Banking
Ombudsman appointed by Reserve Bank of India in line with the
extant guidelines if the resolution suggested by Internal Ombudsman
and accepted by the Bank does not satisfy him or her.

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i. Process of Resolution:-

 Internal Ombudsman shall take into account the evidence

placed before him by the complainant and the Bank, taking into
account the Principles of Banking Law and Practice, directions,
instructions and guidelines issued by RBI and the commitment of the
Bank under BCSBI code and such other factors relevant for forming
an opinion in resolution of the complaint.
 The Internal Ombudsman will be guided by the Compensation
Policy of the Bank as published from time to time while deciding on
the adequacy or otherwise of the compensation paid or payable by
the Bank.
 Internal Ombudsman will have the right to call for such
papers, documents and also call and seek clarification from the
officials of the Bank to get adequate information on the background
of the complaint and justification for decision taken in the internal
redressal machinery.
 Internal Ombudsman can also communicate with the
complainant over phone or by e-mail to seek clarification and/or
willingness for an amicable settlement.

ii. Settlement of Complaint:-

 Internal Ombudsman on being satisfied that the matter needs to

be and can be settled by mutual agreement between the
Bank and the complainant will try to resolve the issue through
conciliation and mediation.

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  The Internal Ombudsman will frame the terms of the possible
settlement and seek the views of the Bank and then the
complainant.
 Where it appears to the Internal Ombudsman that there exist
elements of a settlement which may be acceptable to the Bank as
well as the consumer, he shall formulate the terms of the possible
settlement and submit them to the parties for their observations.
 If the parties reach settlement on such terms formulated or
reformulated, the Internal Ombudsman would draw a
Settlement Agreement and advise the parties to sign the same.

iii. Time Frame for Settlement:-

 Rejection of complaint will be communicated by Internal

Ombudsman within 15 days of receipt of complaint from the
complainant.

 Settlement of complaint will be completed within a period of 30

days from the date of receipt of complaint from the complainant.

 For any specific reason, for collection of documents or information

if additional time is required, Internal Ombudsman will communicate
the requirements of such additional period which is justifiable for
arriving at a decision.

C. Banking Ombudsman:-

June 15, 1995 – RBI announced the Banking Ombudsman Scheme, revised
w.e.f 14.06.2006, Amended in 2007 & 2009.

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 Essential Requirements for complaint:-

 Bank has rejected a complaint or complainant has not received any

reply within 1 month after the bank has received his representation or
he is not satisfied with the reply given.

 A period of 1 year has not lapsed

 Compensation is limited to Rs.10.00 lacs.

 Not a subject matter settled through Ombudsman in previous

proceeding and not pending with any other court
 Not frivolous or vexatious in nature.

i. Compliance Function:-

The compliance Function is an integral part of Bank‟ s business activity

and Corporate Governance structure. A Bank should hold itself to high
standards while carrying on business and at all times strive to satisfy that
effective Compliance Policies and Procedures are followed. The bank has
to comply with the various legislations and instructions issued by various
regulatory authorities like RBI, SEBI, IRDA and Government of India.

ii. Compliance Issues:-

 Whether Customer Service Committee is formed?

 Whether the meeting is held once in a month?
 Whether all the printed materials used by retail customers including
AOF, Pay-in-slips, passbooks, etc. in trilingual form is available?
 Whether “May I Help you?” counter is available?

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 Whether time norms for specialized business transactions are
displayed predominantly in the Banking Hall?
 Does the branch exchange soiled & mutilated notes?
 Is the TDS certificate issued without the customer asking for it?
 Whether the employees‟ working hour commence, 15 minutes before
commencement of business hours?
 Whether the entrance of the branch and ATM are provided with
ramps so that the persons with disabilities /wheel chair users can
enter and conduct business without much difficulty?
 Whether the message “Customer can also tender the cheques at the
counter and obtain acknowledgement on the Pay-in-slips: is
displayed?
 Whether a notice requesting the customers to meet Branch Manager
is displayed regarding grievances, if the grievances remain un-
redressed?
 Whether the complaint book with perforated copies in each set, so
designed as to instantly provide an acknowledgement to the
customers and intimation to the controlling office is available?
 Whether the complaint form indicates that the first point or
redressal of complaints is the Bank itself and that the complainants
may approach the Banking Ombudsman, only if complaint is not
resolved at the Bank level within a month?
 Whether all the machines installed in the branch is working?
 The above issues are indicative and not exhaustive and the bank has
comply with the various instruction issued from time to time in the
interest of the customer.

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D. Consumer Protection Act (COPRA):-

The Consumer Protection Act, 1986 was enacted to provide a simpler and
quicker access to redress of consumer grievances. The Act seeks to
promote and protects the interest of consumers against deficiencies and
defects in goods or services. It also seeks to secure the rights of a
consumer against unfair trade practices.

The Act applies to all goods and services unless specifically exempted by
the Central Government. It covers all the sectors whether private, public
or cooperative.

This Act has provided machinery whereby consumers can file their
complaints which will be heard by the consumer forums with special
powers so that action can be taken against erring suppliers and the
possible compensation may be awarded to consumer for the hardships he
has undergone.

The consumer under this law is not required to deposit huge court fees,
which earlier used to deter consumers from approaching the courts. The
rigours of court procedures have been replaced with simple procedures as
compared to the normal courts, which help in quicker redressal of
grievances. The provisions of the Act are compensatory in nature.

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 Findings & Discussion

Study of Grievance Redressal System in the Bank with suggestions for

improvement based on the questionnaire collected from various
respondents , we analyzed the data on the following parameters:

1) What according to you are top three areas for customer complaints?
Kindly mention by putting 1, 2 or 3 in the boxes below?

25

20

15

10 1st rank
2nd rank
5
3rd rank
0
Transfer of Cheque ATM cum Credit Card Internet Bank Loan Mobile
amount Payment Debit card Banking Banking
from one
account to
another

Inference: As per above study top three areas for customer complaints
are ATM cum debit card, Internet Banking & Mobile banking. In which
complaint regarding ATM cum debit card is maximum, followed by
internet banking and mobile banking.

The complaint related to ATM cum debit card is poor network, unable to
dispense cash, card is not accepted by the machine, and ATM machine is
not working, no cash / cash out in ATM machine.

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2) Are customers aware about our internal grievances redressal system?

Are customers aware about our internal grievances redressal system?

Chart Title
90

80

70 YES, 80%
60

50

40

30

20

10 NO, 20%

0
YES NO

Inference:

As per above study 80% customers are aware about our internal
grievances redressal system. Remaining 20% people are not aware
because it may be there are many rural branches in the country,
number of customers are illiterate.

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3) Is our staff aware about Grievance redressal system?

Is our staff aware about Grievance redressal system?

Chart Title
Series1
120

100

80

60
YES
40 98%

20

NO, 2%
0
2%
YES NO

Inferences:

As per study 98% of our staff aware about Grievance redressal system
it means most of the staff are knowing about the redressal system of
our bank. Actually 100% of our staff should know about the system.

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4) Is TAT followed in complaint redressal?

Is TAT followed in complaint redressal ?

Chart Title
90

80

70 YES, 80%

60

50

40

30

20
NO, 20%
10

0
YES NO

Inferences:
TAT followed in complaint redressal, 80% participants respond
positively. In 20% cases it might be delayed due to postage, lack of
subject knowledge, technical reason etc.

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5) Is customer service committee is active at branch level?

Is customer service committee is active at branch level?

Chart Title

90

80
82%
70

60

50

40

30

20
18%
10

0
YES NO

Inferences:
82% participants replied that customer service committee is active
at branch level and works properly, while remaining 18% believe that
due to workload, less awareness and not taking customer meeting
seriously are the reason behind that customer service committee is
not active at branch level.

Grievance Redressal System in the Banks suggestions for improvement.

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6) Is customer care unit functioning is helping our customers?

Is customer care unit functioning is helping our customers?

Chart Title
70

60 YES, 67%

50

40

30 NO, 33%

20

10

0
YES NO

Inferences:
As per our study 67% participants believes that customer care unit
functioning is helping our customers, while remaining 33% thought
that people at customer care unit are not well aware about bank’s
products, technology so they are not able to satisfy customer
instantly. Most of the time customer care unit contact number is not
approachable.

Grievance Redressal System in the Banks suggestions for improvement.

31
7) Is other banks complain redressal system is better than us

Is other banks complain redressal system is better than us

Chart Title
70

60

50 NO, 63%
40

30 YES, 37%
20

10

0
YES NO

Inferences:
As per study 63% participants response that our complain redressal
system is better than other bank’s because our complain redressal
system is easily approachable, TAT is very good, online portal is
available. Only 37% participants think that other banks complain
redressal system is better than us.

Grievance Redressal System in the Banks suggestions for improvement.

32
8) According to you , is there any shortcomings in our bank’s
grievances redressal system

Chart Title
According to you , is there any shortcomings in our bank’s grievances redressal system

80

70
NO, 71%
60

50

40

30

YES, 29%
20

10

0
YES NO

Inferences:
29% participants respond that there are shortcomings in our bank’s
grievances redressal system which are response of customer care unit
is not satisfactory, lack of awareness of grievances redressal system
among front line staff.

Grievance Redressal System in the Banks suggestions for improvement.

33
 Consumer complaints and RBI
As per the latest data with relation to complains, it is digital payments
related complains that grew by 9 %.

Digital transactions (including mobile, internet, ATM debit and credit

cards) accounted for 28 percent of the total consumer complaints
received by the RBI between July 2017 and June 2018.

The Reserve Bank of India (RBI) said that ATM debit cards and credit
cards contributed to 22.8 percent of the total consumer complaints it
received between July 2017 and June 2018. Another 5.2 percent were
related to mobile and electronic banking transactions.

Including these figures, digital transactions (including mobile, internet,

ATM debit and credit cards) accounted for 28 percent of the total
consumer complaints received by the Banking Ombudsman in the above
stated period. This is a 9 percent increase over the previous year (2016-
17).

In 2017-18, it received a total of 163,590 complaints, and stated that the

disposal rate for these complaints stood at 96.5 percent between 2017-
18 as opposed to 92 percent in 2016-17.

The Banking Ombudsman Scheme (BO Scheme) was introduced in 1995 as

a cost-free and expeditious grievance redressal mechanism for bank
customers. Over the years, it has gained significant traction.

Of the total 163,590 complaints, 14,691 were due to non-payment of

cash. This means that account was debited but cash was not dispensed
by ATMs. Another 1,166 were related to less or excess amount of cash
dispensed by ATMs. 965 of them were relating to account debited more

Grievance Redressal System in the Banks suggestions for improvement.

34
than once for one transaction at an ATM or a POS machine, while 2,117
of them were related to stolen or cloned cards. 12,647 complaints were
about credit cards. Of that, 30 percent were regarding incorrect billing
or debits. Another 8 percent were about incorrect reporting status of
credit information to the Credit Information Bureau, while 5 percent
were about threatening calls and/or inappropriate approach by recovery
agents.

National consumer helpline

Customer service in banking is one of the most important ways to keep
customers coming back. It includes responding to customers‟ questions
and complaints in a thorough and timely manner and interacting with
customers through face to- face meetings, telephone, mail, fax and
email. Most, if not all, bank employees are involved in some aspect of
customer service. A complaint is an expression of concern or
dissatisfaction by any party against a bank. Because of increased
competition, banks are required to become more and more customer-
focused. It is more costly to acquire new customers than it is to retain
existing customers.

Retaining customers requires customer service staff in banks to provide

service that is quick, error-free and convenient. Good customer service
is the heart of banking. Today banks have a wide variety of competitors
for business. Because of the amount of competition, unique products in
the banking industry aren‟ t as important as outstanding customer service.
Banks continually strive for improvements in this area. Examples of such
techniques include taking customer surveys and
Grievance Redressal System in the Banks suggestions for improvement.
35
monitoring calls that come in through the call center. Incentives, such as
customer service awards, may be offered to encourage staff members to
improve the customer support they offer.

Frequently Occurring Problems are:-

• Charging High Interest than decided for loans
• ATM discrepancies (ATM related problems)
• Incorrect interest (ROI) / Excess Billing in Credit cards
• Not providing NOC for Auto/ Home Loans
• Insurance policy given on credit cards without consent
• Delay in Housing Loan and Auto Loan
• Misbehavior of DSA‟ s / Call Centers / Recovery Agents
• Delay in sanction of loans • Unsatisfactory redressal

Advocacy:

NCH has entered into convergence with several banks where complaints
related to respective banks are sent through electronic mail for
immediate redressal. We facilitate companies to get back to their
consumer & vice versa consumer to the respective companies. We are
persuading other banks to join this process for customer complaint
redressal mechanism.

There are certain banks shirking to join such arrangements with us and
our efforts are on to bring them into the system Redressal System NCH is
Grievance Redressal System in the Banks suggestions for improvement.
36
providing the names and addresses of not only the nodal officer,
Principal Nodal officer but also Bank CEO's / Chairman, as this is proving
to be the only effective mechanism which works.

These details may be obtained by dialing NCH.

Tier 1: The first tier of redressal advised by NCH to complainants is the

nodal officers of the banks concerned or the zonal heads. However in a
number of banks, the internal redressal mechanisms of the banks were
inadequate.

Tier 2: . Banking is one of the few sectors, which have the tier II system
in the Banking Ombudsman Scheme covering the entire country.

Tier 3: In case the Tier 1 & 2 do not provide respite, the consumer can
approach the Reserve Bank of India. Convergence The following 15
banks, both under Public & private sectors, are a part of convergence @
NCH. Other banks have been approached but they are reluctant to join.

Grievance Redressal System in the Banks suggestions for improvement.

37
 Suggestions

Based on the finding, it can be said that most banks have done their best
to enhance the satisfaction level of customers. However, there is always
scope for improvement and if the suggestions derived out from this
research are considered, things can further improve.

 In our study, satisfaction level with regard to responsiveness

component and empathy component is low. Therefore, the banks
should pay special attention to ‘Human Resource Development’ by
giving timely training to the bank employees to conduct themselves
better.
 An efficient grievance redressal cell should be formed to process
customers’ complaints. With this they can improve their customer
care services.
 Banks should win the customer’s confidence by providing them
guidance regarding service charges, service tax, interest rate,
penalty if any, etc., at an early stage.
 Procedure of lodging complaint should be made simple and
information regarding this should also be displayed at appropriate
places.
 To develop the social banking environment, bank officials should
maintain good relationship with the customers.
 Frequent awareness programs for customers to have greater
understanding with the modes of complaining.
 Bank officials should make efforts to redress the grievances of
customers without complaining. A separate team can be formed at

Grievance Redressal System in the Banks suggestions for improvement.

38
 branch level in banks and the employees should be trained in
technical as well as behavioral aspects.
 The bank employees should offer quality services to their
customers along with instilling confidence in the customers at all
times during personal interactions with them.
 Compensation should be given to the aggrieved customers
adequately and the defaulting officials may be penalized. The
grievance redressal system of banks should be audited frequently
by the internal and external agencies.
 Digital platform to be made more effective and user friendly as
digital transactions (including mobile, internet, ATM debit and
credit cards) accounted for 28 percent of the total consumer
complaints received by the RBI between July 2017 and June
2018 and issues in our bank is not an exception to it.
 Functioning of various recovery agents/agencies are to be
closely monitored as it is also a complain prone area and
hamper the image/reputation of bank.

Grievance Redressal System in the Banks suggestions for improvement.

39
 CONCLUSION

The success of the bank mainly depends on its customers. Being a

service industry, all banks should aim at satisfying the customers’
needs by providing maximum features in their services including
grievance redressal services. Banks should provide an effective
grievance redressal system to its customers and monitor regularly the
current level of customer satisfaction. Banks are lagging behind in the
responsiveness component and empathy component of grievance
redressal system of banks for customers. Thus some remedial
measures are vital for the banks to win over customers.

Grievance redressal and service can be improved if the suggestions

made above are implemented in true spirit.

The study has some limitations also, so it may not fit at all the cases or
situations depending on the geographic location and internal
organizational set up.

Grievance Redressal System in the Banks suggestions for improvement.

40
 References
RBI Website

BCSBI Website

Banking Ombudsman Website

IBA Website
IIBF Website

Grievance Redressal System in the Banks suggestions for improvement.

41
 Questionnaire
Kindly provide your free, frank & honest opinion for the purpose of research on
“Study of Grievance Redressal System in the Bank with suggestions for
improvement”

1 What according to you are top three areas for customer complaints? Kindly
mention by putting 1 , 2 or 3 in the boxes below:

 Transfer of amount from one account to another

 Cheque Payment

 ATM cum Debit card

 Credit Card

 Internet Banking

 Bank Loan

 Mobile Banking

 Any other related to banking services ………………………………………………………

2 Are customers aware about our internal grievances redressal system?

1. Yes
2. No
If no, put your open views? ………………………………………………………………………….

3 Is our staff aware about Grievance redressal system?

1. Yes
2. No
If no, then Why? …………………………………………………………………………………………….

4 Is TAT followed in complaint redressal?

1. Yes

Grievance Redressal System in the Banks suggestions for improvement.

42
 2. No
If no, then Why? ………………………………………………………………………………………………………………………..

Your suggestions for adhering to TAT …………………………………………………………………………………….

5 Is customer service committee is active at branch level?

1. Yes
2. No
If no, then Why? ……………………………………………………………………………………………………………

If yes ,then how it is useful ?.......................................................................................

6 Is customer care unit functioning is helping our customers?

1. Yes
2. No

If no, then Why? ……………………………………………………………………………………………………………………

7 Is other banks complain redressal system is better than us

1.Yes
2.No

If yes, then how? ………………………………………………………………………………………………………………..

8 According to you , is there any shortcomings in our bank’s grievances redressal

system
3. Yes
4. No
If yes, then how? ………………………………………………………………………………………………………………

9 Suggest suitable action plan for better implementation of existing redressal

system/ improvement in present redressal system.

Grievance Redressal System in the Banks suggestions for improvement.

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